News release

STAMFORD, CT

Fairfield County Posts Boost in Leasing Activity at Midyear 2016

2016-09-14T05:00:00Z

Fairfield County rebounds after slow first quarter

STAMFORD, Conn., September 14, 2016 — After a slow start to the year, leasing activity ramped up throughout Fairfield County in the second quarter of 2016, according to JLL research. Tenants signed for about 800,000 square feet of office space this quarter, a 45 percent increase in leasing activity compared with the 550,000 square feet of leasing velocity in the first quarter of the year.

"Leasing activity in Fairfield County gained significant traction, especially in Class A, transit-oriented buildings, compared with the slow start we witnessed in the first quarter," said Edward Tonnessen, Managing Director with JLL's Connecticut/Westchester office.

The banking and financial services sector, followed by marketing and communications, drove much of the activity in Fairfield County taking 208,595 square feet, or 25 percent of the leases signed this quarter. Citigroup's renewal at 750 Washington Boulevard in Stamford's Central Business District decreased from approximately 80,000 square feet to 47,278 square feet. Charter Communications signed a short-term lease for 73,564 square feet at 400 Atlantic Street, but plans to expand in the next few years once it relocates to Stamford from its New York City office. Both Citigroup and Charter Communications have contributed to tightening Class A properties in Stamford's Central Business District during the second quarter.

The healthcare industry continues to open new medical office centers across all of Fairfield County. Stamford Hospital signed new leases at both 372 Danbury Road in Wilton and 75 Holly Hill Lane in Western Greenwich. Yale New Haven Hospital expanded its presence by 4,879 square feet in Stamford North at 260 Long Ridge Road.

"As office buildings continue to be repositioned in the area to meet medical demand, less supply should create more demand, lower vacancy, and higher asking rents for tenants seeking traditional office space in Fairfield County," said Tonnessen.

The strong deal volume across a broad range of industries helped fuel a drop in Fairfield County's overall vacancy rate, which fell to 23.1 percent in the second quarter of 2016, a decrease of 5.3 percent (or 1.3 percentage points) from 24.4 percent the previous quarter. The county's Class A vacancy rate dropped to 22.7 percent this quarter, a decrease of 7.0 percent (or 1.7 percentage points) from 24.4 percent in the first quarter of 2016.

Overall average asking rents in Fairfield County rose to $36.35 per square foot in the second quarter of 2016, an increase of less than 1.0 percent from $36.19 per square foot the previous quarter. The county's Class A rents hardly changed, falling slightly to $41.96 per square foot this quarter from $41.97 per square foot in the first quarter of 2016.

Stamford CBD/Railroad

The large transactions inked by Citigroup, Charter Communications and Bank of Ireland, along with a number of smaller deals, drove the Stamford CBD/Railroad's Class A vacancy rate down to 30.2 percent in the second quarter of the year, a 7.1 percent (or 2.3 percentage point) decrease from 32.5 percent the previous quarter. The submarket's Class A vacancy rate would fall to 16.5 percent if the entirely vacant UBS building at 677 Washington Boulevard was excluded from the current inventory.

Overall average asking rental rates in the Stamford CBD/Railroad rose to $51.38 per square foot in the second quarter of 2016, an increase of less than 1.0 percent from $51.16 per square foot the previous quarter. The submarket's Class A rents rose to $53.69 per square foot this quarter, an increase of 1.0 percent from $53.16 per square foot in the first quarter of 2016.

Greenwich CBD/Railroad & Greenwich Non-CBD

Between both the Greenwich CBD/Railroad and the non-CBD submarkets, nearly 150,000 square feet in leasing velocity was recorded in the second quarter. Notable building sales transacted in Greenwich include 411 West Putnam Avenue, 500 West Putnam Avenue and 330 Railroad Avenue—a potential indicator that investors are anticipating increased leasing activity, both office and medical, in the near future.

Overall average asking rental rates in the Greenwich CBD/Railroad fell to $89.74 per square foot in the second quarter of 2016, a decrease of 1.0 percent from $90.65 per square foot the previous quarter. The submarket's Class A rents barely moved this quarter, falling to $95.06 per square foot from $95.10 per square foot in the first quarter of 2016.

Overall vacancy rates in the Greenwich CBD/Railroad submarket fell to 15.2 percent in the second quarter of 2016, a decrease of 3.8 percent (or 0.6 percentage points) from 15.8 percent the previous quarter. The submarket's Class A vacancy rate dropped to 16.5 percent this quarter, a decrease of 5.2 percent (or 0.9 percentage points) from 17.4 percent in the first quarter of 2016.

JLL is a leader in the New York tri-state commercial real estate market, with more than 2,300 of the most recognized industry experts offering brokerage, capital markets, property/facilities management, consulting, and project and development services. In 2015, the New York tri-state team completed approximately 32.6 million square feet of lease transactions; arranged investment sales, notes, debt and equity transactions valued at more than $8.2 billion; managed projects valued at $7.8 billion; and oversaw a property management, facilities management and agency leasing portfolio exceeding 141 million square feet.

About JLLJLL (NYSE: JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate. A Fortune 500 company with annual fee revenue of $5.2 billion and gross revenue of $6.0 billion, JLL has more than 280 corporate offices, operates in more than 80 countries and has a global workforce of more than 60,000. On behalf of its clients, the firm provides management and real estate outsourcing services for a property portfolio of 4.0 billion square feet, or 372 million square meters, and completed $138 billion in sales, acquisitions and finance transactions in 2015. Its investment management business, LaSalle Investment Management, has $59.1 billion of real estate assets under management. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit www.jll.com.